Will Phony Populists Hijack the Fight Against Inequality?
Schmidt took up the inequality conundrum during his address at the South by Southwest (SXSW) conference in March. He proposed three ways for the government to close the gap: shore up the safety net for the poorest citizens; invest in education, particularly in science and technology; and give more support to fast-growing start-ups, which he dubbed “gazelles.”
But even with the favoritism Schmidt is calling for, past results suggest the gazelles will not live up to their promise as job creators. Silicon Valley has generated only 30,000 tech-related positions since 2008, while the region lost more than 40,000 manufacturing jobs in little more than a decade. Google’s $380 billion market cap is about seven times greater than General Motors’, but GM employs more than four times as many workers. Meanwhile, WhatsApp—which Facebook bought in February for $19 billion—employs just fifty people.
Schmidt sees no problem with the imbalance. As he said at SXSW, “Let us celebrate capitalism: $19 billion for fifty people? Good for them.” Schmidt’s inequality agenda is opportunism at its most crass: it may make him and his friends even richer, but it’s no prescription for full employment or higher wages for the masses.
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These days, every politician wants to be a populist, but few want a class war. The essential question for Democrats is whether or not an effective policy response demands one. Unserious contributions like Schmidt’s, if accepted as “populist” policy, threaten to reduce a question of justice to a discussion of how the 1 percent can have its cake and put its fingers in the populist pie, too. But when progressives like Warren talk about breaking up the “too big to fail” banks, reforming corporate governance structures or tying wages to productivity, they are calling for a deep rupturing of the pact that Democrats have made with the corporate elite.
Many party centrists aren’t ready to end the affair. “The essential problem with the Democratic Party is that you have, for a variety of reasons, a wide number of Democrats who are also dependent on corporate interests for their funding and their support and, you know, have not come down clearly on the side of working families,” says Bernie Sanders, one of the Senate’s most stalwart progressives.
Of serious concern now is the prospect that those who don’t really want to address fundamental inequities will push Washington away from even modest reforms at the first possible opportunity. The backlash could come after the fall’s midterm elections, in which Democrats are forecast to fare poorly, due in large part to gerrymandering and a number of Senate swing races happening almost exclusively in red states.
The critical task, then, lies in building a national movement strong enough to convince the Democrats that making a real commitment to workers and the poor is not only a moral but a political imperative. Heather McGhee, the president of the social justice policy organization Demos, notes that “politicians are opportunists—we just have to keep telling them this is the best opportunity, over and over again.” The willingness of tens of thousands of low-wage workers to walk off the job is what pushed the Democrats to embrace a wage hike as a rallying cry for 2014, and Obama to raise the minimum wage for federal contractors.
“There is only so far that a technocratic approach can take us,” McGhee adds. “I think that the story we tell about the future of our country and what’s gotten us to this place has to have heroes; it has to have redemption; it has to have a sense of what’s right and what’s wrong.”
It must also have villains. Senator Sherrod Brown, who won a tough 2012 race in Ohio with a pro-labor message and harsh words for Wall Street, showed that voters far from the liberal coasts are ready for stronger stuff. “Republicans commit class warfare every day,” he notes, but when Democrats point it out, “they accuse us of class warfare. And too many of us shrink from the discussion—and from the battle. Once we get over that fear, we not only govern better; we win elections.”
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